Energy Management – A Board Issue
How planned is the energy consumption in your organisation? Perhaps the board should be involved!
In many countries around the world today energy is a boardroom issue. The cost of energy, statutory requirements and legislation being imposed is increasingly affecting the bottom line of businesses.
Here in Australia, the recent political stuttering around the subject of energy, renewables and energy efficiency as a national topic has no doubt distracted interest by the C-Suite but business can ill afford to ignore energy as an issue any longer – the financial and risk implications are just too great.
A few questions to ask at your next board meeting are:
“What is our company’s strategy for coping with energy uncertainty?”
“Who is responsible for energy in our company?”
“Is energy a line item on the company accounts?”
“Do we understand the ‘use’ of energy as well as the cost?”
“Do we have a dedicated energy manager?”
If your company does not employ an energy manager and does not have an energy plan there will be limited ways of predicting what your energy budget should be. Ignore your energy productivity potential or underestimate your energy budget and the cost difference will come straight out of your profit margin.
Are you a supermarket? How many trolleys of grocery shopping does it take to pay your annual energy bill?
Are you a hotel? How many rooms per night do you need to sell each year to pay your energy bill?
In the UK, Morrisons, a grocery store chain with over 500 stores, has to sell two full shopping trolleys per second to pay their annual energy bill.
Similarly, Whitbread, a multinational hotel chain has to sell 432,200 hotel rooms per year to pay their annual energy bill.
How much do you need to sell in products and/or services to pay your annual energy bill? What is the cost of those sales?
The chances are it costs a lot more to sell than it does to invest in energy efficiency to have the same result on your bottom line.
Every kWh you buy should be productive.
Analysis of available ABS data in the manufacturing sector undertaken by the Australian Alliance to Save Energy (A2SE) suggests that a saving of $1 in energy cost (net of project cost) is equivalent to between $13 and $18 of sales at the factory gate.
Food for thought? You need an energy strategy…… coming soon.
For information about managing your energy consumption, call us on (02) 9468 9300.
A special thank you goes out to Lord Redesdale and the Energy Management Association in the UK for permission to use and/or reproduce their material.
Article written by Robert Nicholson – Technical Director (Energy Services)